Hawaii Tries Health Coverage For All

HONOLULU — Dr. Jack Lewin figures that if not for Watergate, there would be no national health care crisis, and Hawaii`s well-regarded system would be the rule, not the exception.

``America would have this system now; health care costs would be lower;

everybody would be covered, and we wouldn`t be in the mess we`re in,`` said Lewin, director of Hawaii`s department of health.

Although almost everything in Hawaii is more expensive, its health care costs are about 25 percent lower than on the mainland. Residents rank among the healthiest people in the nation, and Hawaii has the lowest number of residents without medical insurance of any state. It is as close to a universal health care system as any state has.

Hawaii`s system was inspired by President Richard Nixon`s plan to require all the nation`s employers to insure their workers. The Watergate scandal resulted in Nixon`s resignation in 1974, and fierce opposition by lobbyists put an end to his plan. But not the idea.

The same year, Hawaii passed its Prepaid Health Care Act, mandating employers to provide insurance for all employees who work more than 19 hours a week. Many employers extended the plan to cover the workers` family, so in one fell swoop about 87 percent of the population under 65 was covered by insurance plans that among other things paid for up to 120 days in a hospital a year.

Then two years ago Hawaii launched SHIP, the State Health Insurance Plan aimed at filling the gap between employer mandated health insurance, and Medicaid and Medicare. Drawing from the state`s general fund, SHIP provides coverage for part-time and self-employed workers, the unemployed and all other uninsured residents who are not eligible for Medicaid or Medicare.

Total annual medical costs are only 8.1 percent of the state`s gross product. Canada`s is 9 percent, and the average on the U.S. mainland is 11.1 percent. And depending on whose figures are cited, all but 2 percent to 7 percent of Hawaii`s 1.1 million residents are covered.

``It`s as good as any European nation,`` Lewin claims. ``Nobody lacks access. Everyone`s insurable, unless they haven`t sought out where they fit.`` Supporters of the plan say Hawaii proves a number of things: That universal access, coupled with a strong emphasis on primary and preventive medicine, reduces overall health care costs; that guaranteed health care benefits can be provided in a strong state economy without using Medicaid funds (as Oregon has proposed); and that an employer mandate can be implemented without businesses folding up their tents and leaving.

``Clearly employers have not been put out of business by the plan,`` said Sara Rosenbaum, a senior staff analyst with the Center for Health Policy Research in Washington, D.C.

Hawaii was able to do this because the state law preceded by a year the federal Employee Retirement Income Security Act, which today bars other states from requiring employers to insure workers.

The law actually made buying insurance more affordable for small business, which is 98 percent of all business in Hawaii. Although it prohibits insurers from turning down a worker because of medical history or condition, the mandate also lowers the risk by drawing in healthy young people, many of whom might otherwise reject insurance for more income.

Average monthly premiums for a single person are about $94, and for a family of four, $263 (compared to $150 and $415 in Illinois), according to 1990 figures from the Hawaii Medical Service Association (HMSA), the state`s Blue Cross-Blue Shield organization and its biggest insurer. Although the 1974 law requires employees to pay a share of the premium (no more than 1.5 percent of their gross income), many employers pay the entire cost.

HMSA and Kaiser Permanente HMO, the state`s second-largest insurer, together cover more than 70 percent of the state`s insured. The clout exercised by the two has held down doctor`s fees to the point where a recent survey by the journal Medical Economics found Hawaii`s doctors earn a fifth less than the U.S. net median income for doctors, which is $141,720.

But the measurements Lewin most proudly points to are of health. In its 1991 health rankings of the states, Northwestern National Life Insurance Co. ranked Hawaii No. 1 in the nation (Illinois ranked 32nd).

According to the National Center for Health Statistics, Hawaii has the nation`s second-lowest infant mortality rate after Vermont, and the highest average longevity rate, 77.02 years. It also has one of the nation`s lowest death rates for heart disease and cancer.

The reason, say health department officials, is Hawaii`s near universal access to health care and, most of all, the system`s strong emphasis on primary, preventive and outpatient care.

``People have an incentive to come in when they first get sick,`` said Peter Sybinsky, deputy state director for health resources.